Wynnovation

By Abigail A. Lorden
| October 09, 2008

It's been just over two years since Wyndham Worldwide Corporation (www.wyndhamworldwide.com) spun off from Cendant Corporation in August 2006. The split created one of the world's largest publicly traded hospitality companies with three distinct business units: a vacation exchange and rental network (Group RCI), a resort vacation ownership group (Wyndham Vacation Ownership), and the 7,000-location strong Wyndham Hotel Group, with brands including Wyndham Hotels & Resorts, Ramada, Days Inn, Super 8 and others.

For leadership at Wyndham, the spin-off created an opportunity well beyond that of having its own ticker symbol on the stock exchange. With fists full of extensive consumer research to support their plans, executives leveraged the company's massive scale and newfound independence to foster an era of innovation across its business units, and in particular at its flagship upscale brand, Wyndham Hotels & Resorts.

"We decided to reposition the Wyndham Hotels & Resorts brand to become more competitive in its marketplace, and focused on three pillars: innovation, personalization and flexibility," says Faith Taylor, vice president of innovation and development for Wyndham Hotels & Resorts, which has more than 90 locations across North America and the U.K. The brand has rolled out a host of new projects including a proprietary chair that's wired for Internet, guest rooms that focus on wellness and sustainability, cyber cubbies and more.

These initiatives and the focus on innovation have been a key revenue driver, notes Taylor. "As we implemented these programs in the Wyndham brand, we saw increased scores in guest satisfaction, which was critical for us," she explains.

Mercury rising
The role of innovation in driving revenue at Wyndham Hotel Group is largely due to a deliberate organizational structure between income and IT: the company's top technology exec also oversees revenue management. "When I was originally approached about the position, it was a revenue management position," says Jeff Edwards, executive vice president and chief information officer for Wyndham Hotel Group. "The company was looking for someone to help drive revenue across the brands through pricing strategies and competitive research. But to enable a revenue management strategy, I knew we needed IT. It's an enabler of a broader strategy in the business as opposed to a cost center. It sets up a built-in need for innovation. As a result, we don't build anything that doesn't support the revenue drivers."

These core revenue drivers are outlined in a 1,000 page business requirements document dubbed Project Mercury. "Being a good IT guy, at first I thought, 'If we want to have next-gen technology, we should line up a bunch of systems and do vendor demos.' But then I thought, no; let's look at trends. Innovation doesn't necessarily mean that you want to surf the Net on your coffee maker. It may mean you want to move the needle slightly, or do something that makes or saves money for the business." As such, identifying and analyzing the company's core revenue drivers was a pre-requisite in setting goals for innovation efforts.

To create the business requirements document, Edwards enlisted the combined wisdom of 60 of the company's own subject matter experts (SMEs) and 12 external consulting firms. Two years in the making, Project Mercury roadmaps where distribution is going in the future. It evaluates questions like: How do people book hotel rooms? Is social networking real or a fad? How should Google be leveraged?

The resulting document has sections on all of the major distribution channels that drive business into the company's hotels: GDS, OTA, brand websites, voice and property direct. It also covers in-room technology and data initiatives. Collaboration teams, known as councils, are charged with owning the individual channels and have specific goals for revenue, profitability and/or percentage of improvement. The councils are made up of internal personnel from marketing, technology and brand operations, as well as external SMEs. "All day, every day innovation is fostered by way of those individual groups," says Edwards. "Now that we have this framework, we see this as a living document," he explains; it gets revised and updated as new trends or data become available.

In-room innovation
With the Mercury document in hand and a green light to innovate, Taylor and her team set forth to energize the Wyndham Hotels & Resorts brand via personalization and flexibility. Doing so requires a comprehensive approach to trend-spotting, research and development. "We do regular research, looking at competitive trends inside and outside the market, and we work with our vendors who are developing new technology and programs," she says.

Taylor scours the annual Consumer Electronic Show looking for inspiration, noting that it's currently not common practice for hotels to take this route. At the 2008 show, Taylor recalls that just a few hotel brands were represented out of the thousands of vendors and exhibitors in attendance, but she believes this will change in the near future. "The next generation of hotels will be wireless and use technology to enhance their guest experience, from voice and face recognition technology to converting entire walls," she predicts.

To revamp public spaces and guest rooms, the Wyndham brand partnered with the iconic architectural and design firm Michael Graves & Associates (www.michaelgraves.com). The Graves team was commissioned to create a series of in-room products exclusive to Wyndham Hotels and Resorts. One of the most notable innovations to come out of this partnership is Wyndham's exclusive, multi-function Smart Chair. The leather lounger is just as comfortable for reading and relaxing as it is for plugging in and surfing the Net. It's equipped with a built-in power source and is wired for Internet access, allowing guests to plug in their portable devises for work or play. The chairs are included in guest rooms and public spaces. Additionally, public spaces within the hotels are also seeing the addition of cyber booths and cubbies, with full Internet connectivity, while Nintendo Wii technology is cropping up in the brand's fitness centers.

A propietary entertainment system, currently in the pilot phase, will allow guests to access entertainment and games as well as offer an e-commerce component. Plans are in place to roll the unit out into select markets across all Wyndham brands. "Ultimately, we'd like for our unique entertainment system to be downloadable and accessible to guests when they're not on the property, so they can take advantage of the Wyndham relationship wherever they are," explains Edwards.

Pure & green
Taylor's team is also focused heavily on environmentally-friendly products, health-consciousness and sustainability. In August, select Wyndham Hotels and Resorts have been able to offer a certain complement of healthier guest rooms, thanks to the chain's new ClearAir initiative. Through a partnership with New York-based PURE Solutions (www.pureroom.com), Wyndham ClearAir rooms undergo a multi-step cleaning process designed to remove up to 98 percent of allergens. CleanAir incorporates a bacteria- and virus-resistant process for laundering linens and cleansing walls and carpets, and a medical-grade air purification system. In hotel meeting rooms, air is purified at a greater intensity and filtrated eight times more frequently than standard air-handling systems. The goal is to achieve 99.9 percent effective treatment of air and surfaces.

In other green initiatives, the company's vacation ownership brand, Wyndham Vacation Ownership, is testing the use of a keycard that will activate or deactivate all electrical systems in the room upon a guest's entry or exit. Wyndham Hotels & Resort's New York City property will, by the first half of next year, use 10,000 square feet of solar energy and will be LEED-certified.

Next steps
Taylor and Edwards are continuing to explore next-gen systems that enable their revenue management goals, and will be keenly watching overseas trends as well as testing technologies in some of their European locations. "We're piloting one right now in some of our U.K. hotels that will give guests the ability to use their cell phone as their room key," says Edwards. It works by tapping into near field communications (NFC, a protocol of radio frequency identification). The unlocking frequency can be transmitted to an NFC-enabled cell phone, which will then unlock the door when waved near a door lock with proximity sensors.

Extending the application of cell phones, U.S. guests will be able to make hotel bookings from web-enabled phones by the end of this year. "A lot of our limited service brands will benefit from the cell phone booking," Taylor says, particularly pointing to business travelers who will be able to check availability and make reservations from the road.

Ultimately, it will continue to be the company's massive scale that helps enable these projects. "Scale is key to the value driver," says Edwards. "We can leverage the price points of products and service provided, and we can also leverage the vendor community to provide more or improved services to our guests at the same or better price."